September 4, 2008
China's National Development and Reform Commission announced that the nation's soy processing capacity would be capped at 75 million tonnes a year in 2010 and the figure would be further reduced to 65 million tonnes in 2012.
Small soy crushers would be shut down while expansion by big plants would be restricted as the nation's top planner seeks to regulate excess processing capacity.
The commission will not approve new facilities or expansion by individual soy plants or groups that already process more than 15 percent of the country's annual total, it said without elaborating.
China currently has the capacity to crush 80 million tonnes of soy but crushed only 34 million tonnes last year. Despite the figure, crushing companies are still expanding operations.
The restrictions appear targeted at large crushers owned by foreign companies such as, Wilmar International, ADM and Bunge Ltd which account for about 70 percent of soy crushing operations in China.
Many Chinese crushers were bought over by foreign companies after suffering huge losses in 2004 due to expensive imports.
The NDRC also said it would encourage domestic firms to take over small rivals. It also set stricter capital and environmental criteria.
The report also said China will encourage the processing of other oilseeds, such as rapeseed, peanuts, cottonseed and sunflower seed, while increasing imports of soyoil.
Soyoil is China's most popular cooking oil, accounting for almost half of its 23 million tonnes annual consumption.